The American Expat Financial News Journal reliably reports information about the “Name and Shame List”. The report generally includes information about the number of people on the list and people who are reported more than once. The report often attempts to determine whether those on the list are citizenship relinquishers or green card abandoners.
The purpose of this brief post is to explain the statutory basis for the reporting obligations, identify the relevant statutes and clarify some common misconceptions.
A summary of the analysis is that:
1. All individuals renouncing (whether “covered expatriates” or not) US citizenship during the relevant period are to be included on the “Name and Shame List”.
2. Green Card holders that are “long term” residents” are required to be included on the list
It is common knowledge that the lists contain many inaccuracies on the list.
Which statutes are relevant to determining the reporting obligations?
IRC 6039G – https://www.law.cornell.edu/uscode/text/26/6039G
IRC 877 – https://www.law.cornell.edu/uscode/text/26/877
IRC 877A – https://www.law.cornell.edu/uscode/text/26/877A
Renunciation of U.S. Citizenship triggers a “Reporting Frenzy”!
It’s simply unbelievable. The renunciation of U.S. citizenship triggers more reporting obligations on the part of individuals and government agencies than anything else. More than birth. More than death. More than marriage. More than bankruptcy. More than conviction of a crime (probably). It’s unbelievable.
The purpose of this post is to “slice and dice” what those reporting obligations are.
Let’s Go On A Magical Reporting Tour
The rules governing information reporting when one relinquishes U.S. citizenship are found in Internal Revenue Code 6039G. They impose reporting obligations on “some” individual relinquishers (“covered expatriates”), the State Department whenever a Certificate of Loss Of Nationality has been issued and on U.S. Treasury. (I will comment separately on the situation of Green Card holders at the end of this post.) Most of this is summarized in the following two tweets. But, because this is so confused, I am going to take the time to parse the statute.
It’s all in Internal Revenue Code – 6039G Note that Section 6039G is found in Subtitle F which is the – “Procedure and Administration” – part of the Internal Revenue Code. In other words, it deals only with information reporting. It does NOT impose taxation. Interestingly, Section 6039G imposes reporting requirements on individuals, the State Department, U.S. Treasury (and in the case of Green Card holders) the Immigration authorities.
That pretty much sums it up. For those who want to understand the analysis …